A Shared Sacrifice, Jonathan Slashes Cost of Governance

2012-01-08
THISDAY Newspaper

President Goodluck Jonathan Saturday announced measures to curb government expenditure in line with a belt-tightening regime arising from the removal of the subsidy on petrol that has stirred Nigerians’ anger and triggered a clamour for a reduction in the cost of governance.

The president, in a nationwide broadcast last night ahead of tomorrow’s strike by labour and continued protests by civil society groups to protest the deregulation of the downstream sector of the oil industry, cut the salaries of political appointees in the executive arm of government by 25 percent.

Jonathan made the broadcast on a day the Action Congress of Nigeria governors at a meeting in Lagos urged restraint in protesting against the removal of fuel subsidies.
The Nigeria Labour Congress, however, faulted the measures outlined in the president’s broadcast, saying they were not enough to address the problems caused by the removal of the subsidy on petrol.

The president said foreign trips by political office holders, including himself, would be reduced to the barest minimum while government delegations on such trips would be reduced as part of the cost-saving measures.

The government is also planning to reduce the number agencies and parastatals as part of the cost-saving measures.

He acknowledged the pains the removal of the subsidy on petrol had imposed on Nigerians, adding that such a tough choice had to be made “to safeguard the economy and our collective survival as a nation.”

The president, who regretted fresh attacks by Boko Haram in Gombe, Adamawa, Borno and Yobe States, also seized the occasion to reassure Nigerians that his administration was working to guarantee the safety of lives and property in view of the wave of terrorist attacks on people in Northern Nigeria.

Jonathan said the 25 percent cut in the basic salaries of all political office holders in the executive arm of government would begin from this year, adding that government was reviewing the number of committees, commissions and parastatals with overlapping responsibilities with a view to restructuring them.

He said the report on the review would soon be submitted and the recommendations would be implemented.

He also directed all ministries, departments and agencies to take steps to reduce their overhead expenses.

The president said as part of measures to cushion the effects of the removal of fuel subsidies, he would today launch a mass transit intervention programme to bring down the cost of transportation nationwide.

The programme, he added, will be implemented in partnership with state and local governments, labour unions, transport owners, and banking institutions while funds would be given to transport stakeholders at zero percent interest.

The government will also grant import duty waivers on all needed parts for locally made mass transit vehicles, as part of efforts to create additional jobs in the economy.
The president said he had directed all MDAs to execute projects designed to cushion the impact of the subsidy removal in the short, medium and long-term as outlined in the Subsidy Reinvestment and Empowerment Programme document.

In addition, he has also ordered the mobilisation of contractors to rehabilitate the Port Harcourt-Maiduguri railway line and to complete the Lagos-Kano railway line.
Besides, he has further directed the immediate commencement of a public works programme that will create jobs for 10,000 youths in every state of the federation and the Federal Capital Territory, thus creating 370,000 jobs nationwide.

The president who regretted the pains caused by the removal of the fuel subsidy, said: “I personally feel pained to see the sharp increase in transport fares and the prices of goods and services. I share the anguish of all persons who had travelled out of their stations, who had to pay more on the return leg of their journeys.

“If I were not here to lead the process of national renewal, if I were in your shoes at this moment, I probably would have reacted in the same manner as some of our compatriots, or hold the same critical views about government.”

Jonathan said his administration chose to embrace deregulation, as efforts by previous administrations to tinker with the pump prices of petroleum products instead of complete deregulation of the downstream sector, did not achieve the desired economic effect.
On the attacks on Christians in the north-east, Jonathan urged Nigerians to eschew bitterness and acrimony and to live together in harmony and peace.

In a related development, the ACN governors, in a communiqué after a meeting hosted by Lagos State governor, Mr. Babatunde Fashola, urged the people to show restraint and eschew violence as they exercise their constitutional rights to protest the fuel subsidy removal.

They, however, expressed reservations about the removal of fuel subsidy and called for immediate review of the revenue allocation formula and implementation of fiscal federalism.
The communiqué was signed by Fashola, Ogun State governor, Senator Ibikunle Amosun, Ekiti State governor, Dr. Kayode Fayemi and Osun State governor, Mr Rauf Aregbesola. Edo State governor, Adams Oshiomhole and his Oyo State counterpart, Senator Abiola Ajimobi, were unavoidably absent from the meeting.

The governors said since their party had already expressed its reservation about fuel subsidy, particularly its sudden implementation, they aligned themselves with the party’s position.

But the Nigeria Labour Congress, in a statement jointly signed by its acting secretary general, Mr. Owei Lakemfa and the secretary general of the Trade Union Congress, Mr. John Kolawole, wondered if the president’s gesture was symbolic or a fundamental contribution to economic recovery.

The unions said, “We see this as a populist statement that has no foundation in reality. If a transporter who used to buy petrol at N65 per litre now buys it between N141 and N220, what appeal can be made to him not to increase his fares by a high percentage?
“How do you ‘deregulate’ the economy and hope to regulate transport fares by private operators?”

The unions dismissed the speech “as undoubtedly due to the resistance of Nigerians to the unreasonable increase in petrol prices and the planned national strikes scheduled to begin to.

“So the president having to address Nigerians, is the first gain of the planned protests.
“But the president’s address follows the pattern of other documents (like the SURE Programme) by his administration: long in rhetorics and short on basic issues.

“For instance, the major anchor of the broadcast is that salaries of political office holders are to be cut by 25 per cent.

“But he failed to tell us how much this will amount to. Is this a mere symbolic gesture or a fundamental contribution to economic recovery?”

The union said that transport fare was just one of the items that shot up and that prices of basic commodities like food had also increased, “and there is a fuel price hike-engineered hyper inflation in the country.”

They insisted that the president should have reversed the price of PMS to N65 which would have automatically reduced rising tension in the country.

They reiterated that Nigerians cannot afford the high fuel prices and would not accept the hyper-inflation that the policy had created.

They maintained that the president had lost a great opportunity in his broadcast by sticking to his guns; that the unreasonable increase in fuel prices will remain.
“The labour movement and its allies on behalf of the Nigerian populace reiterate that the broadcast has changed nothing and that the indefinite strikes, rallies and mass protests scheduled to commence nationwide on Monday, January, 9 2012, will go on.

“The will of the Nigerian people must prevail over that of any government in power,” it stated.

CUTTING THEIR COATS
• 25% cut on basic salaries of political offices holders in 2012
• Cut in overseas travel for political office holders, including the president
• Size of delegations on foreign trips to be cut
• Review of committees, commissions and parastatals with overlapping responsibilities
• MDAs to reduce overheads

CUSHIONing the pains
• To launch mass transit intervention programme today with states, LGAs and banks at 0% rate of interest
• Duty waiver on spare parts for locally made mass transit vehicles
• Mobilised contractors for rehabilitation of Port Harcourt-Maiduguri railway line and completion of Lagos-Kano line
• Employment of 10,000 youths in all states and FCT